Because the Business Case Approach (BCA) has been designed to encourage fit-for-purpose effort, your path through the phases of the BCA will be different depending on the complexity and risk of your investment proposal.
A project’s business case is built progressively, and the work that needs to be done and the questions that need to be answered are gathered into phases. Not all projects will progress through all phases – applying fit-for-purpose effort will mean that sometimes phases can be skipped or combined, but the same business case assessment questions will still need to be answered.
For example, you may find that the work that needs to be done in a particular BCA phase – the information that needs to be gathered and the questions that need to be answered – has already been done and can simply be incorporated or referenced. The amount of work that needs to be done should be fit for purpose relative to the complexity of the potential investment.
Based on past experience, the majority of investment proposals to the National Land Transport Fund (NLTF) are low to medium risk and complexity, and will likely be able to progress from the point of entry, to strategic case and then to a single-stage business case, as indicated in the diagram above.
You can use the BCA Q&A tool to guide your critical thinking about the phase of the BCA you should progress to next.
There are investment decision gates along the way, where the problem owner and investor(s) assess the business case to consider whether the investment is worthwhile in relation to the desired outcome, and so whether or not to continue with the business case.
The problem owner develops an initial view of the potential problem or opportunity, and reviews existing information so an informed decision can be made about whether there really is a problem that needs fixing, and, if so, what phase the business case should start at, and how it should progress through the BCA.
This phase is about defining and understanding the problem or opportunity, and showing there will be substantial enough benefits from doing something to justify investment. Workshops or other consultation will need to be undertaken to ensure agreement between stakeholders.
This phase is about gathering new evidence and data to better understand the problem and its context, and identifying options and alternatives to address the problem. These could include a broad mix of activities that might be delivered by multiple parties over a period of time. Programme business cases are generally developed only for investments that have a higher risk and complexity, which could involve more than one transport mode or other interventions. It reduces risk and ensures all appropriate options are considered.
The single-stage business case (SSBC) confirms and develops an activity, and details how it will be implemented. Because they are developed for each activity, one programme may have multiple SSBCs. It is a combination of the:
If the proposed investment is very high risk and complexity, you may choose to do a separate IBC before beginning a DBC.
SSBCs, IBCs and DBCs are sometimes called activity-level businesses cases, because they focus on the details of an activity.
As you progress through the BCA, keep in mind the 16 business case assessment questions that your business case needs to answer. These are the same questions that will also be used by decision makers to assess the strength of a completed strategic case, programme business case and single-stage business case (or indicative and detailed business case).
The roles and responsibilities of people involved in the Business Case Approach vary as the business case progresses through different phases. The main roles across the whole process are:
Problem owner – the person who has identified the problem or opportunity, and who initiates the BCA.
Investors – are responsible for deciding whether to invest resources to address the problems identified. Investors may include the problem owner’s organisation, Waka Kotahi and any other co-investors.
Stakeholders – are the people who have the most knowledge of a subject and/or represent an interested or affected party, for example a local authority, community group or iwi. They will be consulted at various stages of the BCA.
Waka Kotahi investment advisors – are available for support and guidance throughout the BCA process, and will need to approve the business case at each phase.
Workshop facilitators – are responsible for running the workshops that are usually required during the BCA process. Getting the right facilitator is beneficial in running an effective workshop, and it is worth considering hiring a professional.
Online learning modules have been developed by Waka Kotahi, and are available to our partner organisations.
The introductory course, ‘Our Business Case Approach for transport investment’, includes two modules:
You can access these modules through your Waka Kotahi single sign-on or if you’re already registered through your organisation as an external user. If you’re a new external user, follow the registration prompts in InvestHub.
These information sheets are designed to accompany the learning modules.